Next story in Capitol Hill

WASHINGTON — After wrestling with — and finally abandoning — a 1,900-page catch-all spending bill stuffed with more than $8 billion in home-state projects known as earmarks in Washington and pork in the rest of the country, Senate leaders need to come up with a measure to keep the federal government running into early next year.

Nearly $1.3 trillion in unfinished budget work was packed into the spending measure, including $158 billion for military operations in Iraq and Afghanistan. But Senate Majority Leader Harry Reid gave up on the bill Thursday after several Republicans who had been thinking of voting for it pulled back their support.

Republican leader Mitch McConnell of Kentucky had thrown his weight against the bill in recent days, saying it was "unbelievable" that Democrats would try to muscle through in the days before Christmas legislation that usually takes months to debate.

"Just a few weeks after the voters told us they don't want us rushing major pieces of complicated, costly, far-reaching legislation through Congress, we get this," McConnell said. "This is no way to legislate."

Most likely course forward
The most likely course forward was a stopgap funding bill that would keep the government running at current levels into February. That would set up a huge challenge for President Barack Obama, Republicans taking over the House, and a more narrowly divided Senate that will still be under Democratic control.

The White House belatedly weighed in Friday behind a yearlong funding bill that's mostly frozen at current levels. It passed the House last week but it has already been soundly rejected by Senate Republicans, who are insisting on a short-term stopgap bill.

Just Thursday, Defense Secretary Robert Gates came out against the House measure because it would cut the Pentagon $19 billion below levels in the failed Senate omnibus bill. Now, press secretary Robert Gibbs says the House bill would provide "certainty and continuity" that's preferable to kicking the unfinished budget work into next year.

Efforts next year to wrap up the unfinished budget work aren't likely to go smoothly, and there's the potential for a government shutdown if the process breaks down. A shutdown would mean furloughing all but essential federal workers and temporarily closing national parks and most agencies.

Thursday's turn of events was a major victory for earmark opponents such as Sens. John McCain, R-Ariz., and Tom Coburn, R-Okla., who for years have been steamrolled by the old-school members of the powerful Appropriations Committee.

The spending barons saw their power ebb in the wake of midterm elections that delivered major gains for Republicans — with considerable help from anti-spending tea party activists.

"We just saw something extraordinary on the floor of the United States Senate," a grinning McCain said.

The $1.27 trillion catchall bill wrapped together 12 bills — blending $1.1 trillion for the operating budgets of every federal agency with an infusion of money to carry the war in Afghanistan into its 10th year — into a single foot-tall piece of legislation that Democrats had hoped to pass with just a couple of days' worth of debate.

It was designed to bankroll the day-to-day operations of the government for the budget year that started Oct. 1, paying for the almost one-third of the federal budget that Congress has to pass each year.

The House and Senate typically spend months on the 12 annual spending bills, but Democrats didn't bring even a single one to the Senate floor this year, an unprecedented collapse of the appropriations process. The House only passed two of the 12 bills and didn't make any of the others 10 public.

Setback for the White House
The sinking of the bill was a setback for Obama, who supported it despite provisions to block the Pentagon from transferring Guantanamo Bay prisoners to the United States and to fund a program to develop a second engine for the F-35 Joint Strike Fighter, which the administration says is a waste of money. Obama came under fire from Republicans for supporting the bill after promising after the election to take a harder line on earmarks.

Just Thursday, Secretary of Defense Robert Gates made a public push for the omnibus measure at an appearance at the White House, saying that operating under a stopgap measure frozen at current levels would be a major hardship for the Pentagon.

McConnell had earlier quietly backed the effort to produce the catchall legislation, which had significant input from Republicans on the Appropriations panel.

But release of the bill on Tuesday sparked an outcry among the GOP's conservative political base. Senate Republicans held two combative closed-door meetings in which the rank-and-file turned up the heat on those few Republicans who were considering voting for the bill.

Republicans were also irate that the measure contained money to begin implementation of Obama's controversial health care law and a financial overhaul measure that all but a handful of Republicans opposed.

On the merits, most of the rest of the bill had bipartisan support. It stuck to a spending cap sought by Republicans while boosting spending for Head Start, veterans programs and Pell Grants for disadvantaged college students. But that message didn't get out amid the firestorm over earmarks and the measure's remarkable size.

McConnell proposed Thursday to keep the government running at current funding levels through Feb. 18. By then, Republicans will have taken over the House and bolstered their strength in the Senate, giving them greater leverage to force spending cuts.

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Video: Congress looks past tax deal

Closed captioning of: Congress looks past tax deal

>>all of this represents just one item on the agenda of this lame duck congress before they leave town on the
christmas break
, before the new congress comes in and gets sworn in. but there's a whole lot more to decide before they skip town. kelly o'donnell on
capitol hill
with the list tonight.

>> reporter: good evening, brian. they've moved on to one of the top
foreign policy
priorities for the president, the new s.t.a.r.t. nuclear arms treaty with rushi. republican senators met with the president and told him directly that the democratic majority leader
harry reid
could harm the chances. their complaint the democrats plan to vote tomorrow on don't ask, don't tell, alienates republicans who say if the treaty is so important, don't jump to those more controversial social issues. democrats say they have to act now, because they have the votes to finally repeal the ban on gays serving openly in the military. will republicans who don't want to see that change retaliate by killing the treaty? republicans say
harry reid
has poisoned the well around here but will vote on the treaty on its merits. but there's plenty of friction around